Portugal. Country Profile

Transcription

1 Portugal Country Profile

2 Contents Country Overview 1 Clearing Systems 6 Foreign Exchange Controls 8 Taxation 9 Investment Opportunities 11 Citi Solutions and Services 14

3 Country Overview Banking Holidays in Portugal New Year s Day Carnival Good Friday Easter Corpus Christi National Day Republic Day All Saint s Day Restoration of Independence Immaculate Conception Christmas New Year s Eve January 21 February 29 March 1 April 30 May 10 June 5 October 1 November 1 December 8 December 25 December 31 December Key Facts Capital City Lisbon Population 10,781,459 (July 2012 est.) Currency Euro Currency SWIFT Code EUR Exchange Rate (EUR per USD) (2012 est.) GDP $23,000 (2012 est.) GDP Growth Rate -3% (2012 est.) Exports $57.8 billion (2012 est.) Imports $67.03 billion (2012 est.) Inflation Rate 2.9% (2012 est.) Source Portugal Country Profile 1

4 Country Overview Portugal has become a diversified and increasingly service-based economy since joining the European Community - the EU's predecessor - in Over the following two decades, successive governments privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country qualified for the Economic and Monetary Union (EMU) in 1998 and began circulating the euro on 1 January 2002 along with 11 other EU members. The economy grew by more than the EU average for much of the 1990s, but the rate of growth slowed in The economy contracted 2.5% in 2009, before growing 1.4% in 2010, but GDP fell again in 2011 and 2012, as the government began implementing spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package, agreed to in May GDP per capita stands at roughly two-thirds of the EU-27 average. Portugal also has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a destination for foreign direct investment, in part because its rigid labor market hindered greater productivity and growth. However, the government of Pedro PASSOS COELHO has enacted several measures to introduce more flexibility into the labor market, and, this, along with steps to reduce high levels of public debt, could make Portugal more attractive to foreign investors. The government reduced the budget deficit from 10.1% of GDP in 2009 to 4.5% in 2011, an achievement made possible only by the extraordinary revenues obtained from the one-time transfer of bank pension funds to the social security system. The budget deficit worsened in 2012 as a sharp reduction in domestic consumption took a bigger bite out of value-added tax revenues while rising unemployment benefits increased expenditures more than anticipated. Poor growth prospects over the next year have reinforced investors' concerns about the government's ability to achieve its budget deficit targets and regain full access to bond market financing when the EU-IMF financing program expires in Banking System Banks in Portugal Banco de Portugal was established on 19 November 1846 and is the central bank of the Portuguese Republic. According to its Organic Law, Banco de Portugal is a public-law legal person with administrative and financial autonomy and own property. The organs of the Bank are the Governor, the Board of Directors, the Board of Auditors and the Advisory Board. The Bank complies with a code of conduct. Banco de Portugal has its head office in Lisbon, a branch in Oporto, a number of agencies in mainland Portugal and two regional delegations (Madeira and Azores). Banco de Portugal is part of the European System of Central Banks (ESCB) since its inception in 1998, which consists of the European Central Bank (ECB) and the national central banks of the European Union (EU). In that capacity, Banco de Portugal pursues the objectives and is involved in the performance of the tasks entrusted to the ESCB. In accordance with the Treaty on European Union, the primary objective of the ESCB shall be to maintain price stability, which is the key objective of monetary policy. The Bank is part of the Eurosystem comprising the ECB and the national central banks of the Member States whose currency is the euro since its creation on 1 January The Governor performs his duties of member of the Governing Council and of the General Council of the ECB, in accordance with the Treaty and the Statute of the ESCB/ECB. Mission and Tasks of the Banco de Portugal Monetary Policy The primary objective of the Eurosystem, of which Banco de Portugal is an integral part, is to maintain price stability, i.e. to maintain the purchasing power of money. This objective is laid down in the Treaty establishing the European Community. The governor of Banco de Portugal performs the tasks of member of the Governing Council and of the General Council of the European Central Bank (ECB). 2 Portugal Country Profile

5 Country Overview Asset and Reserve Management It is incumbent on Banco de Portugal to manage the foreign assets of the country or others of its responsibility, at two main levels: its own investment assets and others; the ECB s foreign reserve assets. Supervision of Money and Foreign Exchange Markets Also within the scope of its participation in the ESCB, the Bank is responsible for guiding and supervising money and foreign exchange markets. Prudential and Market Conduct Supervision It is particularly incumbent on Banco de Portugal to provide for the stability of the national financial system, performing for the purpose the function of lender of last resort. The Bank thus carries out the prudential supervision of credit institutions and financial companies. The governor of Banco de Portugal chairs the Conselho Nacional de Supervisores Financeiros (National Council of Financial Supervisors), an entity which comprises Banco de Portugal, the Portuguese Securities Market Commission and the Insurance and Pension Funds Supervisory Authority. Banco de Portugal is also responsible for supervising the conduct of institutions in their relations with customers the so-called market conduct supervision. Within this scope, Banco de Portugal intervenes in the supply of financial products and services, to ensure that institutions act with due diligence, neutrality, loyalty, discretion and respect in their relations with customers, as well as in the demand for products and services by stimulating and disseminating information to bank customers, aimed at promoting a careful assessment of their commitments and the risks they may incur. An important initiative undertaken by the Bank within this field was the creation of the Portal do Cliente Bancário (bank customer website), which allows customers to submit complaints regarding supervised institutions or request the location of financial assets in case of the death of the holder. Regulation of Payment Systems In addition to its issuing task, it is incumbent on the Bank to regulate, oversee and promote the smooth operation of payment systems, namely within the scope of its participation in the ESCB. Currency Issue Banco de Portugal issues euro banknotes, which are legal tender and have discharging power and puts metal coins into circulation, including commemorative coins, although the European Central Bank has the exclusive right to authorise their issue. The Bank s printing works are located in the Carregado Complex, which produces banknotes and serves as a distribution centre for banknotes and coins, meeting the needs of the banking system. Collection and Compilation of Statistics Banco de Portugal is also responsible for the collection and compilation of monetary, financial, foreign exchange and balance of payments statistics, in particular within the scope of its co-operation with the ECB, which are published in the Statistical Bulletin and accessible via BPstat Statistics online. Production of Economic Research and Analyses Banco de Portugal produces research and analyses of the Portuguese economy, the euro area economy and its international environment, as well as of financial markets and systems. Within this scope, the Bank publishes the Annual Report, the Financial Stability Report, the Economic Bulletin and the Monthly Economic Indicators. Portugal Country Profile 3

6 Country Overview International Activity Reflecting the international nature of its tasks, Banco de Portugal cooperates, in particular, with the central banks of Portuguese-speaking African Countries (PALOP), and participates in the activities of several international organisations, ensuring the representation of the Portuguese State in some of them. Relations with the State It is incumbent on Banco de Portugal to act as intermediary in the international monetary relations of the State, as well as advise the Government in economic and financial fields. Location of Financial Investment Centres Lisbon Citi in Country Citi was established in Portugal in 1985 when the market was opened to Private and Foreign banks. Citi in Portugal offers a complete range of financial services to corporate and Financial InstitutionI customers including Cash Management, Security Services, Fund Services, Foreign Exchange, Derivatives, Fixed Income and Investment Banks amongst others. Citi operates in Portugal through a branch of Citibank International PLC,UK and is a wholly owned subsidiary of Citibank, N.A. Citi in Portugal is a full member of the local clearing systems and the Central Depository. Lisbon Address Citibank International Plc, Sucursal em Portugal Edifício Fundação Rua Barata Salgueiro, 30-4º Lisboa Portugal Tel: Fax: Services Offered to Citi Clients Citi Portugal offered the following services either through its branch in Portugal or through its global network: Treasury Cash Management Liquidity Management Investments Loans Trade Services Buyer and Supplier Financing Agency and Trust Fund Services 4 Portugal Country Profile

7 Country Overview Direct Custody and Clearing Securities Lending Corporate Finance Foreign Exchange Fixed Income Investmentk/advisory Portugal Country Profile 5

8 Clearing Systems The current structure of the Portuguese payment system consists of a single high-value system and a retail system with five sub-systems. The clearing systems are managed by Banco de Portugal. All participants maintain a current account with Banco de Portugal for settlement purposes. High Value SPGT Sistema de Pagamentos de Grandes Transacções: was the Portuguese Real Time Gross Settlement (RTGS) system, up until March 2009, when it closed. On that date Portugal migrated to the TARGET2 system TARGET2 TARGET2 (Trans-European Automated Real-time Gross settlement Express Transfer system for EU/EEA-wide Euro payments) is the latest version of the Pan European Real Time Gross Settlement (RTGS) system which transformed the decentralised network of payment systems into a true pan-european payment system with a single technical clearing platform. Three Eurosystem central banks provide an integrated market solution the Banca d Italia, the Banque de France and the Deutsche Bundesbank which jointly provide the single technical infrastructure, the Single Shared Platform (SSP), of TARGET2 and operate it on behalf of the Eurosystem. Since March 2009 TARGET2 is the single RTGS system in Portugal. Citi Lisbon is an indirect participant of TARGET2 via Citi London Retail SICOI Automated Interbank Clearing System (Sistema de Compensação Interbancária): SICOI is an automated interbank exchange and settlement circuit, allowing information to be channelled (indirectly) between institutions participating through Sociedade Interbancária de Serviços SIBS (Interbank Services Company). Information received by SIBS is processed, selected and electronically directed to various entities: recipients, drawees and Banco de Portugal. The Bank undertakes the final financial settlement on a daily basis, making debit or credit entries in the deposit accounts of the banks participating in the system, netted against the amounts to be paid/received by each financial institution. SICOI is regulated by an Instruction of Banco de Portugal and includes the clearing of the following transactions: cheques, Multibanco system operations (nationwide ATM and EFTPOS network), electronic transfers (credit, domestic and foreign), direct debits and bills of exchange. The SICOI currently encompasses five sub-systems: Cheque Sub-System Cheques are processed through automated clearing, but they are settled on a gross basis. Electronic Funds Transfer Sub-system (TEI) The TEI (Transferências Electrónicas Interbancárias) is a fully electronic sub-system operated by Sociedade Interbancária de Serviços (SIBS) for domestic resident and non-resident transfers up to 100,000. There are two payment types: commercial processed on a oneday cycle and interbank processed on a same day basis. Direct Debit Sub-system Fully electronic sub-system operated by SIBS for domestic collections, simplifying the process of collections (particularly the regular ones). Utility services such as water, electricity, telephone, and also rentals and insurance are the most common. Bill of Exchange Sub-system This sub-system is based on the total truncation of commercial bills at the drawer s bank. Information on the bill of exchange is transmitted electronically to the drawee s bank seven days before maturity. There are two types of bills of exchange: domiciliary on which the bills are settled by debiting the customer s bank account and non-domiciliary which may be paid at any bank branch or through the Multibanco Sub-System. Additionally, this sub-system also accepts commercial bills denominated in Foreign Currencies that are settled in the respective currency through correspondent bank accounts via swift. 6 Portugal Country Profile

9 Clearing Systems Multibanco Sub-system This sub-system operates at ATM and EFTPOS terminals in real time seven days a week and covers transactions made with debit cards, credit cards and prepay (Porta Moedas Multibanco). Citibank only participates in the first 3 sub-systems: Cheques, TEIs and Direct Debits. Clearing Streams Clearing Stream (CS) Payment Type Payment Instruments SIBS Sociedade Interbancária de Serviços Paper Cheques Other paper based instruments SIBS Low Value Electronic Domestic Funds Transfer, TEI (ACH), D Debit SEPA CT & SEPA DD (local routing) TARGET2 via Citi London High Value Domestic Funds Transfer (Wire) Cross-border Funds Transfer Citi London (Indirect) SEPA Access to Step2 for SEPA payments and D Debits via Citi London Funds Availability Schedule Cut-off Time Funding Date Client DR/CR Date Client Value Date Local Currency ACH Electronic Transfers 9pm D-1 OR Value Date Value Date Same Day Local Currency Wires Other banks 1.45 pm D Value Date Value Date Same Day Local Currency Book-to-book 6 pm Value Date Value Date Same Day Foreign Currency Transfers 6 pm Currency Dependent Value Date Same Day Cheque Deposit Currency Dependent Next Day Value Date Same Day Portugal Country Profile 7

10 Foreign Exchange Controls Portugal follows the European policies and directives in place for the euro zone. 8 Portugal Country Profile

11 Taxation There are various types of stamp tax applicable on bank commissions, overdrafts and financing. For detailed information please contact the branch Income Tax Corporate Income Tax (CIT) applies to resident companies, non-resident with permanent establishment in Portugal and to income obtained by non-resident without permanent establishment herein. The general CIT rate is 25% (17.5% in Azores). A municipal surcharge is imposed on resident companies and non-resident entities with a permanent establishment in Portugal, up to 1.5% of the taxable profit assessed for CIT purposes. A state surcharge is also imposed on resident companies and non-resident companies with permanent establishment in Portugal until 2014, exclusive. The state surcharge rate is 3% on the taxable profit in excess of up to The state surcharge rate is 5% on the taxable profit in excess of Consequently, the maximum combined rate of CIT, municipal surcharge and state surcharge may go up to 31.5%. Withholding Tax As of 1 January 2012, the standard WithHolding Tax (WHT) rate levied on investment income matured obtained by resident and non-resident individuals and corporate entities is 25%. Notwithstanding, a 30% WHT rate is levied on (i) investment income obtained by entities resident in off-shore territories, as per list approved by a ministerial order of the Portuguese Minister of Finance (Portuguese black-list ), (ii) investment income obtained by resident entities due by off-shore entities and (iii) income paid in master accounts where the beneficiary owner is not identified. Non-resident beneficial owners domiciled in a country that has signed a DTT with Portugal may apply for the treaty reduced WHT rate provided procedures determined under Portuguese legislation are complied with. The treaty reduced WHT rate applies as an upfront relief at source or a standard reclaim process. Upfront relief at source is available only if tax forms (Form 21-RFI, valid for a one-year period, with certification by the tax authorities of the country of residence of the beneficiary owner required) are delivered to the withholding agent before the 20th of the month following the investment income maturity date. Other Taxes Value Added Tax (VAT) The standard VAT rate applicable to all supply of goods and services (not qualifying for one of the intermediate/reduced rates) is 23% in Mainland, 22% in Madeira and 16% in Azores. The VAT rate applicable to products and services qualifying for the intermediate rate (such as coloured and marked diesel, admission to concerts and other cultural shows, some food such as preserved meat and fish, wine, bottled, plain or sparkling waters, among others) is 13% in Mainland, 12% in Madeira and 9% in Azores. The VAT rate applicable to products and services qualifying for the reduced rate (such as basic foodstuffs and beverages e.g. cereals, fresh meat, fish, fruits and vegetables among others, services related with the cleaning of public roads, as well as collection, storage, transport, recovery and disposal of waste, hotel accommodation and supply of water (non-bottled)), is 6% in Mainland, 5% in Madeira and 4% in Azores. Portugal Country Profile 9

12 Taxation Capital Gains Tax As of 1 January 2012, Capital Gains Tax (CGT) is levied on the disposal of shares, quotas, debt securities, warrants derivatives and other similar securities by resident entities subject to CIT and personal income tax, including individuals and mixed or private subscription investment funds, at a flat rate of 25%. Notwithstanding, the disposal of shares owned held for more than a twelve-month period, bonds and other debt securities by public subscription investment funds is excluded of CGT. As a general rule, capital gains obtained with the disposal of above referred investment by non-resident without a permanent establishment in Portugal are exempt of CGT, except if (i) the non-resident without permanent establishment is owned, directly or indirectly, in more than 25%, by a resident entity, (ii) if the non-resident without permanent establishment is domiciled in an off-shore territory, (iii) if the capital gains result from the disposal of shares in Portuguese companies where at least 50% of the underlying assets correspond to real estate or in the case of the disposal of shares in holding companies where subsidiaries assets are comprised in more than 50% by real estate. In the cases where CGT applies to income obtained by non-resident without a permanent establishment in Portugal, a 25% rate is levied. 10 Portugal Country Profile

13 Investment Opportunities Treasury Bills Treasury bills are short-term government debt securities, with a face value of one Euro, issued at a discount with maturities up to one year, under the responsibility of the Portuguese Government Debt Agency (Instituto de Gestão do Crédito Público IGCP ). They are book-entry securities representing loans to the Portuguese Republic entered in securities accounts opened with the central securities depository managed by the Banco de Portugal SITEME. Commercial Paper Commercial Paper (CP), also known as Promissory Notes, is an unconditional order to pay a fixed amount on the due date. The paper stands solely on its credit rating and investors will use the credit rating in the investment choice. CP is issued by credit-worthy corporations. Non-credit institutions companies issue Commercial Papers (CP) with a tenor up to one year. Trading is restricted to the issuer, to banks, securities houses and interbank market agents. Negotiable Certificate of Deposits A promissory note issued by banks and finance companies is known as a Negotiable Certificate of Deposit. At Call Money Market At Call funds can be recalled, repaid or renegotiated as to interest rate during morning money market trading, until 11 AM GMT, without the need for prior notice. For repaid/recalled funds, transactions must be matched or input into the preferred settlements stream by PM GMT. Cash deals between non-exchange settlement account holders are restricted to the daily settlement session only, as are deals via SWIFT. Term Deposits A savings account or Certificate of Deposit held for a fixed-term with the understanding that the depositor can only withdraw by giving written notice. The term generally is at least 30 days. Stock Market Euronext Lisbon SA The Lisbon Exchange was created on 1 January The Porto Stock Exchange was created almost one century late. On the 10 February 2000, the two exchanges were merged and a new joint company was formed Bolsa de Valores de Lisboa e Porto Sociedade Gestora de Mercados Regulamentados, S.A ( BVLP ) becoming responsible for the management of the regulated cash and derivatives markets, as well as the management of other non-regulated markets. At the beginning of March 2000, a major change occurred in the cash market regulation, with the introduction of new trading rules, more appropriate to market demands. On the 13 June 2001, a Memorandum of Understanding was signed between BVLP and Euronext N.V. and on 13 December 2001, Euronext N.V. and BVLP reach an agreement regarding the financial terms of the merger. At the end of January 2002 the shareholders accept, by unanimity, the conditions of the merger between Euronext N.V. and BVLP and the 6 of February 2002, BVLP officially changes its business name to Euronext Lisbon. On the 2 September 2002, Euronext Lisbon members were able to start trading on all cash market products listed on the markets of Euronext Paris, Amsterdam and Brussels. Portugal Country Profile 11

14 Investment Opportunities To enhance the liquidity and visibility of small and mid-sized firms on its markets and to provide European companies with new financing opportunities, Euronext began to overhaul its listing arrangements in early 2005, with input from finance industry professionals. These reforms culminated in the creation of a single list, Eurolist by Euronext, encompassing all regulated markets. The companies quoted on this single regulated market are classified in alphabetical order and identified on the basis of capitalisation. This makes it possible to distinguish easily between small caps (market capitalisation of less than 150 million), mid-caps (between 150 million and 1 billion) and large caps (more than 1 billion). The single list was first introduced in the French market in February 2005 and then extended to Amsterdam, Brussels and Lisbon on 4 April In January 2007, Euronext N.V. ( Euronext or the Company ), the company incorporated under the laws of the Netherlands and NYSE Group Inc. ( NYSE Group ), the company incorporated under the laws of the State of Delaware (US) have created a joint holding company, NYSE Euronext, Inc. ( NYSE Euronext ), a company incorporated under the laws of the State of Delaware (US). Euronext Lisbon SA Address Av. da Liberdade, 196 7º Piso Lisbon, Portugal Telephone Internet URL Ownership Year Established Instruments Traded Standard Trade Size Trading System Trading Hours NYSE Euronext, a holding company created by the combination of NYSE Group Inc. and Euronext N.V (re-opening) Equities, Bonds, Rights, Warrants, Certificates, Futures None; Minimum of one UTS (Universal Trading Platform) an electronic order matching system 08:00 16:30 Lisbon time (Equities and Bonds) 08:05 17:30 Lisbon time (Warrants) 08:00 16:35 Lisbon time (Derivatives) Capitalisation billion (US$ billion) as of 27 November Listed Companies 51 Exchange Members 66 Trading Members 12 Portugal Country Profile

15 Investment Opportunities Euronext Lisbon SA Guarantee Fund A guarantee fund denominated Sistema de Indemnização aos Investidores, aims to protect small investors and financial intermediaries that sell directly to final investors, are required to make contributions to the fund being triggered in the event of financial difficulties by a Financial Intermediaries. As of 31 December 2006, date of the latest report, the value of the assets protected by the system was billion. For trades executed at Euronext Lisbon to which LCH. Clearnet is the Central Counterparty (CCP), a guarantee fund exists and pays out in the event of a clearing member being declared in default. Please note, certain securities traded at Euronext Lisbon are not guaranteed by LCH. Clearnet and are treated as book entry only. Those securities are non-guarantee in the event of default of a clearing member. Instruments Traded: Equities Interest rate securities Options Warrants Certificates Futures Government Bonds Corporate Bonds Portugal Country Profile 13

16 Citi Solutions and Services Account Services Resident Current Accounts On-shore Resident current accounts are allowed in both local and foreign currencies. Off-shore Resident current accounts are also allowed but are subject to straightforward regulations, approval processes, or licenses. Non-resident Accounts On-shore Non-resident accounts are allowed in both local and foreign currencies. Off-shore accounts are only permitted in local currency. Currency Convertibility Local Currency is freely convertible domestic and off-shore Interest and Overdrafts Overdrafts are allowed for both Residents and Non-residents with On-shore accounts in either local or foreign currency. On-shore operating accounts in local or foreign currency are interest-bearing. Remittance of Dividends and Profits There are no restrictions or controls Repatriation of Capital There are no restrictions or controls 14 Portugal Country Profile

17 Citi Solutions and Services Payments Citi offers clients payment solutions designed for both local and overseas payments. Clients use CitiDirect Online Banking and CitiConnect for Files for payments and can select any combination of services needed to meet both domestic and international payment needs. Multibank Transaction Initiation (MBTI) MBTI enables the concentration of funds into Citi accounts from third party local banks. Using CitiDirect clients can instruct their local banks to move excess funds to Citi, either for investment purposes or to fund shortfalls. This also achieves the up-streaming required in an overlay structure for a regionalised or centralised treasury. The account statements and balances, upon which client instructions are based, are provided by Data Aggregation. Instructions are sent to the local bank across the SWIFT network on behalf of the client. Citi utilises message types MT101 for this purpose. The benefit of the dual capability of Data Aggregation and MBTI is that, once established, customers are able to utilise a single banking platform, CitiDirect, to control concentration, investments, and funding Domestic Transfers Citi Lisbon can provide clients with current accounts and access to CitiDirect electronic banking to allow simple initiation of domestic payments, in Euro and other major currencies as required. Clients can initiate payments to beneficiaries who hold their accounts with other banks in Portugal, or make Book to Book payments to beneficiaries who also hold their accounts with Citi Lisbon. Citipay Citi in Portugal provides a local mass payments solution, CitiPay, both in cheques and/or local ACH. CitiPay provides a cost efficient, convenient and secure means by which Portuguese resident corporate customers can initiate domestic cheque payments and ACH (TEIS) low value payments in an automated way. Customers may generate, import and transmit transaction files to Citi in Portugal via the web-based platform CitiDirect. Upon receipt, Citi in Portugal prints and dispatches the cheques with remittance data. Alternatively if it is an ACH (TEI) payment, it is sent directly to the clearing house (SIBS). Citipay can be used for 3rd party supplier payments as well as payroll. Commercial Cards A Card-based payment solution deployed as a central part of the expense management process for employee Travel and Entertainment as well as procurement. Citi supports a broad range of card products (Corporate, Purchasing, One Card, Lodge and Single-use accounts). Cards are issued in over 100 countries globally, via a single proprietary source, ensuring control and consistency. Citi is the only global bankcard issuer that does not rely on partner banks to deliver local currency Commercial Cards solutions in over 46 different currencies and 26 local languages. Citi is a dual issuer of MasterCard and Visa offering unsurpassed acceptance at 32 million merchant locations and 1,500,000 ATMs in 140 countries. Prepaid Cards Prepaid Card programs offered by Citi are customised solutions that can help companies to improve the effectiveness of sales and marketing campaigns, deliver payroll, make more frequent sales commission payments to a franchised sales force and much more. Portugal Country Profile 15

18 Citi Solutions and Services Utilising Citi s extensive global network, clients can execute same day value payments in many major foreign currencies within Citi s global network. Using CitiDirect, you can initiate foreign currency payments from your current accounts, payment processing within our own global network enables us also to significantly accelerate cross-border payments processing and reduce processing times. Book-to-book Transfers Transfers between accounts held with Citi accounts held outside of Portugal are considered to be Cross-Border Book to Book Transfers and will be processed in real time with the same-day value, subject to cut-off times SEPA Credit Transfers Citi has been one of the key drivers behind the SEPA initiative since its inception. From the launch of SEPA Credit Transfers in January 2008 Citi has been offering this new payment method across all 23 SEPA geographies including Portugal. Clients are enabled to make SEPA Credit Transfers via both our electronic banking and our file based gateway, CitiDirect Online Banking and CitiConnect for Files respectively. The benefits of SEPA to our clients are substantial. Standardisation is created through the adoption of a single set of consistent pan-european payment instruments. SEPA eliminates the need to consider national payment practices, rules, information requirements, etc. and facilitates greater centralisation distributed banking model can become more simplified and optimised. SEPA aligns with existing efficiency initiatives to improve straight-through processing, reduce cost and maximise working capital. In addition, the European payments market offers protection through increased regulation, transparency and competition amongst banks. WorldLink Payment Services A complete solution that enables clients to issue cross-border electronic and cheque payments, It permits you to initiate and control your payments online while simultaneously outsourcing the preparation and delivery of cheque payments and electronic funds transfers. WorldLink Funds Transfers WorldLink Funds Transfers enable you to make payments in over 135 currencies. Citi affects the appropriate funds transfer to the beneficiary s dedicated bank for credit to its account. WorldLink Funds Transfers provide speedier delivery of funds than WorldLink Cheques Global Clearing Foreign currency accounts domiciled off-shore at Citi branches providing high value and cheque payment solutions. Cross-border Funds Transfer Real-time foreign currency high value payments. Foreign Cheque Collections Processing of foreign cheques through the clearing system of cheque origination. 16 Portugal Country Profile

19 Citi Solutions and Services Utilising Citi s extensive global network, clients can execute same day value payments in many major foreign currencies within Citi s global network. Using CitiDirect, you can initiate foreign currency payments from your current accounts, payment processing within our own global network enables us also to significantly accelerate cross-border payments processing and reduce processing times. Book-to-book Transfers Transfers between accounts held with Citi accounts held outside of Portugal are considered to be Cross-Border Book to Book Transfers and will be processed in real time with the same-day value, subject to cut-off times SEPA Credit Transfers Citi has been one of the key drivers behind the SEPA initiative since its inception. From the launch of SEPA Credit Transfers in January 2008 Citi has been offering this new payment method across all 23 SEPA geographies including Portugal. Clients are enabled to make SEPA Credit Transfers via both our electronic banking and our file based gateway, CitiDirect Online Banking and CitiConnect for Files respectively. The benefits of SEPA to our clients are substantial. Standardisation is created through the adoption of a single set of consistent pan-european payment instruments. SEPA eliminates the need to consider national payment practices, rules, information requirements, etc. and facilitates greater centralisation distributed banking model can become more simplified and optimised. SEPA aligns with existing efficiency initiatives to improve straight-through processing, reduce cost and maximise working capital. In addition, the European payments market offers protection through increased regulation, transparency and competition amongst banks. WorldLink Payment Services A complete solution that enables clients to issue cross-border electronic and cheque payments, It permits you to initiate and control your payments online while simultaneously outsourcing the preparation and delivery of cheque payments and electronic funds transfers. WorldLink Funds Transfers WorldLink Funds Transfers enable you to make payments in over 135 currencies. Citi affects the appropriate funds transfer to the beneficiary s dedicated bank for credit to its account. WorldLink Funds Transfers provide speedier delivery of funds than WorldLink Cheques Global Clearing Foreign currency accounts domiciled off-shore at Citi branches providing high value and cheque payment solutions. Cross-border Funds Transfer Real-time foreign currency high value payments. Foreign Cheque Collections Processing of foreign cheques through the clearing system of cheque origination. Portugal Country Profile 17

20 Citi Solutions and Services Receivables Citi provides clients with a wide range of receivables products, leveraging outsourced relationships where it does not have sufficient operational scale. Examples include Merchant Services and low value clearing instruments, such as cash and cheques. Cash Citi has an agency bank relationship with Caixa Geral de Depositos enabling clients to use its branch network for cash deposits Network In May 2008 a network extension agreement was signed with Caixa Geral de Depositos (CGD) the largest retail Bank in Portugal with over 800 branches. The agreement will allow Citi Lisbon customers to use CGD s network and have access to the following services: Cash and cheque deposit Cash withdrawal Social Security and Tax payments ATM collections Domestic lockbox and transport of valuables Incoming Funds Clients can receive both domestic and cross-border receipts into your Citi Lisbon accounts, with value date as follows: Domestic Receipts: Domestic receipts received electronically will be credited to your local currency account on the same day Citi Lisbon receives the funds on our correspondent account, with the same-day value date Cross-border Receipts: Cross-Border receipts received electronically will be credited to you on the same day Citi Lisbon receives advice from our correspondent bank, provided the funds are received before cut-off time. Payments received after this time will be credited to your account with next business day value. The FX market is currently free of restrictions on the purchase or transfer of foreign currency Lockbox Citi s European Lockbox services aim to address the time-consuming and labour-intensive process of capturing data from paper receivables, such as cheques and remittance advices. It enables you to outsource this process to Citi, who will in turn provide you with information that you can integrate directly into your Accounts Receivable system thus streamlining your reconciliation process. Direct Debit (ACH Collections) Drawing of funds out of the account of clients customer held with any local financial institution, based on authority by the customer. 18 Portugal Country Profile

21 Citi Solutions and Services SEPA Direct Debit SEPA Direct Debit or Pan European Direct Debit is a project coordinated by various European Banks. The main purpose is to allow customers to use direct debits schemes in various countries without the need to open accounts in each jurisdiction. Card Acquiring Citi s Card Acquiring partnership is accepting all major Credit and Debit card types and funding is available in EUR or USD, but also in additional currencies. Liquidity Management Citi provides the following liquidity management solutions for clients to help maximise return on cash balances within local and foreign currency cash management operating accounts. Target Balancing Zero Balancing (ZBA) ZBA is allowed for local currency accounts and is also permitted for commingling between a savings and current account. Commingling of resident and non-resident funds is permitted under ZBA with the correct documentation. ZBA is only allowed one way the funds cannot be swept back the next day. Domestic Notional Pooling All domestic notional pooling is strictly prohibited in Portugal. Investments Term Deposits Euro and USD Term deposits are offered locally with interest paid at maturity. Netting Multilateral netting is allowed and settlement should be from local currencies for accounts with Citi. Citi s treasury business offers a wide range of investment vehicles for clients, such as Bank Bills, Commercial Paper, Negotiable Certificate of Deposits, 11 AM at Call Money Market. Citibank Online Investments A web-based portal offers time deposit investments across 18 currencies and can be linked to accounts in 22 countries. In addition, it provides investment opportunities in spectrum of more than 90 institutional funds, including US dollar denominated domestic (US registered), off-shore (non-us registered), tax exempt, tax efficient, government/treasury and non-dollar currency funds. Citibank Online Investments is available via single sign-on through both the CitiDirect Online Banking and TreasuryVision treasury management platforms. Portugal Country Profile 19

22 Citi Solutions and Services TreasuryVision TreasuryVision turns comprehensive forecast data into useful information. View forecasts at a global, regional or local level; by geography, business unit or legal entity; on a daily, weekly or monthly basis. Cashflow forecasting is a powerful and flexible tool providing users the ability to create a holistic forecast including data from banks, internal forecast and systems (e.g., ERP, TMS). Using customisable forecast templates, users can create short-, medium- and long-term forecasts and perform actual versus forecast comparisons. Cash forecasting analytics enable users to analyse all of their legal entity cash forecasts in a single, aggregated view across a variety of available parameters. Trade Services Citi s suite of supply chain solutions mitigate risk and enable our clients to have access to the short-term capital they need to make their business function. Our pioneering work in Export and Agency Finance (EAF), for example, has filled a critical gap in credit during the recent slowdown illustrating our ability to ensure credit flows even in today s times. Our working capital solution sets cover both the internal Trade Finance and outside EAF finance options for firms and are available to both corporates and Financial Institutions, and these solutions are complemented by a range of Trade Services. All of these solutions are grounded in our core strengths: global coverage, expert customisation, client-responsive innovation, and unsurpassed execution. Citi offers a range of services from traditional letters of credit to our Open Account Trade Processing developing risk and working capital solutions that help corporations conduct, monitor, and control international commercial transactions as well as mitigate their associated risks: from issuing and paying letters of credit to handling settlement and administration of documentary collections. Other Trade Services include: Import Letter of Credit (L/C) Export Letter of Credit (Advising, Negotiation and Confirmation) Enhanced Open Account Importers and Exporters who regularly conduct business with each other can reduce the time and costs associated with letters of credit and documentary collections by taking advantage of Citi s efficient, electronic, data-enriched open account trade process. Citi not only effects payment for open account purchases, but also transforms and streamlines the entire reconcilement process between trading partners located virtually anywhere in the world. With Citi s Enhanced Open Account Trade Processing, clients benefit from our team s knowledge of local trade practices, regulations, market risks, and understanding of trade documents. Since we process a very high volume of trade transactions daily, we handle very cost effectively the straight-through processing of trade transactions. Trade Advisor Trade Advisor is a free online inquiry tool available as part of the functionality of CitiDirect Online Banking, provides all parties to trade transactions with information on the status of their transactions. Similar to courier delivery tracking applications, Trade Advisor lets our clients and their business partners and suppliers access summary information online using a transaction reference number. 20 Portugal Country Profile

23 Citi Solutions and Services Trade Finance Guarantees (Performance and Financial) Risk Participation Documentary and Direct Collections Trade Outsourcing for Financial Institutions Channel-finance Export and Agency Finance (EAF) Long-term capital for CAPEX investments and financing cross-border trade flows ECAs and Partnering for Growth ECAs are government agencies that promote employment and growth in their home countries by encouraging exports of goods and services. They guarantee bank finance and supplier finance, and/or provide direct loans, transforming usually non-investment-grade borrowers to AAA/AA assets, allowing commercial lenders to extend financing for longer tenors and larger amounts than would otherwise be possible. Tied Financing Citi offers Tied financing directly linked to procurement of goods. This is an excellent option when goods are primarily sourced from one or two countries. Clients benefits from competitive pricing, longer tenors, diversified funding sources and visibility to future investors. Some ECAs also have programs to support the issuance and confirmation of Letters of Credit and risk converge for Guarantees. Untied Financing Citi can also provide finance that is generally linked to a new investment. This option is best used when goods are sourced from a multitude of countries. Benefits include pricing, which is generally at market terms, longer tenors (over 10 years in many cases) and can often be available in local currency. Citi Procure-to-pay Procure-to-pay is a new end-to-end financial supply chain automation solution in partnership with Ariba. This holistic proposition brings together the electronic invoicing and discount management engine of Ariba with Citi s core payments, trade finance, and commercial cards solutions, delivering increased operating efficiency and integrated supply chain management to our clients. Moreover, Procure-to-Pay is integrated with our Supplier Finance program described above, allowing suppliers to easily access this attractive source of liquidity Portugal Country Profile 21

24 Citi Solutions and Services Securities and Funds Services (SFS) The Securities and Fund Services business consists of a number of products that serve investor, intermediary and issuer clients. These products are global custody, fund services, securities finance, direct custody and clearing, agency and trust and depositary receipts. Each of these products provides market leading, capitalintensive solutions that enable our clients to focus on their core competencies. Global Custody Offers institutional investors a single access point to the world s securities markets, providing securities safekeeping, settlements, administration and consolidated reporting for their global portfolios. Global custody insulates clients from market inefficiencies and is particularly suited to institutions without their own network management function. Securities Finance Enables clients to increase the return on their securities portfolios by lending their custody assets to approved counterparties for a fee. Fund Services Provides operational, administrative and regulatory support to investment professionals including managers of mutual funds, closed-end funds, hedge funds, off-shore funds and pension funds, allowing clients to remain focused on their core activities managing investments and attracting investors. Direct Custody Provides securities services to institutional investors that prefer to have direct access to a local custodian in the various markets in which they invest. Our proprietary branch network enables us to uniquely deliver both domestic and cross-border custody solutions. Agency and Trust Citi is a leading provider of multiple agency, fiduciary and depositary services covering a variety of capital market transactions including structured finance, medium term note and commercial paper programmes, M&A, escrow, project finance and loan administration. With professionals working in financial centres around the world such as New York City, London, Dublin, Frankfurt, Milan, Moscow, Dubai, Mumbai, Shanghai, Singapore and Hong Kong. Depositary Receipts Enable issuers to raise capital and/ or broaden their shareholder base and as a depositary Citi issues and cancels depositary receipts in response to receiving or releasing the underlying shares and provides a full range of shareholder services, including registration and servicing of the depositary receipts, and custody and asset servicing of the underlying securities. 22 Portugal Country Profile

25 Citi Solutions and Services Delivery Systems Cross-border Delivery Systems SWIFT Local Address: <CITIPTPX Messages Time Limits: Messages are acted upon the same day Message Types accepted by Citi include MT100, MT200, MT300, MT400, MT500, MT700 and MT900 series messages.> CitiDirect Online Banking CitiDirect Online Banking is the primary platform utilised by clients to manage both local and global cash management products and services, providing a direct window into Citi s global platform for cross-border payments. CitiConnect for Files CitiConnect for Files is a single global data communications gateway providing clients with a variety of file-based capabilities enabling you to manage your global, regional and local payments and direct debit activities. Whether you want to automate cash management activity, execute global/regional shared service centre strategies, or implement greater levels of Straight Through Processing, clients may accomplish this through our CitiConnect for Files solution. Portugal Country Profile 23

26 Notes 24 Portugal Country Profile

27 Citi Transaction Services Citibank, N.A. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. The information contained in these pages is not intended as legal or tax advice and we advise our readers to contact their own advisors. Not all products and services are available in all geographic areas. Any unauthorised use, duplication or disclosure is prohibited by law and may result in prosecution. Citibank, N.A. is incorporated with limited liability under the National Bank Act of the U.S.A. and has its head office at 399 Park Avenue, New York, NY 10043, U.S.A. Citibank, N.A. London branch is registered in the UK at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, under No. BR001018, and is authorised and regulated by the Financial Services Authority. VAT No. GB Ultimately owned by Citi Inc., New York, U.S.A.